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AT A GLANCE

The financial activities industry saw an increase in employment with 26,000 jobs gained in January 2015

Overall, in January 2015, average hourly earnings in the industry for all employees increased to $31.09, up from $31.01 in December 2014

For the first time in decades, New York is proving that it can grow rapidly without leaning on Wall Street - since the end of 2009, the city has added about 425,000 jobs

Mar 01, 2015

What’s Trending with Wages?

During the Great Recession, American workers were among the hardest hit as unemployment rates grew higher and average pay rates fell. Now, with the economy showing four consecutive years of growth and unemployment at a six-year low, one would expect wages to also recover. However, recent data from the Bureau of Labor Statistics (BLS) shows that the average hourly wages grew by about 2.2 percent in the past year.

When adjusted for inflation, this is an increase of barely over 1 percent.

According to the BLS, the average American workers earned $24.57 per hour in December 2014. This was up from $24.17 per hour a year earlier.

Total Private Average Hourly and Weekly Earnings

Source: BLS

While average hourly wages have only slowly increased in the past year, economists point to signs that wages could be rising soon. Data from Glassdoor indicates that employees are more confident about their employment situation and are increasingly optimistic about the potential for a pay raise. Most employees believe that they will get a pay raise from between 3 to 5 percent in 2015.

Average Private Hourly Wages, by Industry

Source: BLS

Recent Wage Growth

According to the latest jobs report by the BLS, January 2015 was a month of strong employment gains with the economy creating more than 1 million new jobs in a three-month stretch for the first time in nearly two decades. The 257,000 net new jobs that employers added in January were spread across high and low paying industries. Average private hourly earnings rose 12 cents to $24.75 in January. This wage growth is the highest in more than six years.

Doug Handler, chief U.S. economist at IHS Global Insight, says that as the number of unemployed workers decreases, pressure will increase on employers to raise salaries. He estimates that wage growth should reach about 2.5 percent in 2015.

“We have been expecting both stronger wage growth and stronger labor force growth. Certainly this is a good start, but let’s see if it continues.” ~Gus Faucher, Senior Economist at PNC Financial Services Group